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I definitely agree with both of you. My guess for the price differential is that Google is just more competitive. There are more people advertising there, as well as participaters in the content network. For search results, it makes sense to me that the greater the competition, the higher the prices.
In regard to Yahoo! conversion, honestly, I used to think their results pages were more misleading than Google's. But now that Google has followed in placing results on top of the natural results, they are about equally confusing to novice users. And, in my opinion, it is exactly these users who are more prone to convert because they are more quick to click on whatever is in front of them. I know this sounds over-simplified, but I've always felt that the Yahoo! user is less savvy than the Google user. The less-savvy user (regardless of what engine he/she may use) is also less likely to go through a full research phase to their buying cycle, which translates to better conversions for us SEMs. Is this what you mean by "demographics," Rand?
I wouldn't be so quick to scream click fraud yet, though. With Google's budget, I'm sure they have excellent tracking and click fraud technology. Since you're already revising ads, I would try writing more "high-brow" ads for AdWords and keep your YSM ads at status-quo. If there is more technical information ("30% savings" or "drill-down reporting," e.g.) you can include, I bet it would fly better on AdWords.
Over the past year, I've definitely seen a trend developing in AdWords: competition is getting fierce. I'm paying more for terms that were once in a non-competitive category. And it's just going to continue since many SMBs are just realizing now that they can incorporate P4P (PPC) campaigns with even a meagre budget. September 29, 2005